Underweight The S&P restaurants index has had an exceptional month, following surprisingly healthy results from both McDonalds and Starbucks, which collectively represent approximately 80% of the index. We think…
Feature Asset Allocation Amid Late-Cycle Turbulence BCA today published its 2019 Outlook, Late-Cycle Turbulence,1 our annual discussion with long-time clients Mr X and his daughter, Ms X. Recommendations This note is simply to…
The outlook for housing and residential investment remains an important part of the growth outlook for the U.S. economy, even if our U.S. strategists think its impact on growth has diminished (see next Insight). More important…
Neutral When we downgraded the S&P home improvement retail index (HIR) to neutral in September, the core of our thesis was that fixed residential investment as a percentage of GDP appeared to have peaked, up 50% from trough to the…
Despite a stellar Q3 earnings print, the S&P 500 had a terrible October as EPS continues to do the hard work in lifting the market (Chart 1). Chart 1EPS Doing The Heavy Lifting We bought the dip,1 consistent with our view…
Underweight Marriott International, the hotel heavyweight of the S&P hotels, resorts and cruise lines index reported results on Monday and the company's outlook was grim, calling for revenue growth below analyst forecasts on…
Underweight While we remain constructive on financials that benefit from higher rates, we continue to recommend investors avoid the consumer discretionary sector - the other early cyclical - that suffers when interest rates rise. The…
The above chart depicts this inverse correlation consumer discretionary equities have with interest rates, especially the fed funds rate. Most discretionary equites are levered off of floating rates and thus any increase in the…